Whole Class
What part of the business cycle is where the economy is currently in a deep recession, but is not getting worse?
A) Peak
B) Trough
C) Inflationary Gap
B - Trough
This term describes the tools, machines, factories, and or technology that helps promote economic growth.
The $ value of all final goods and services produced within a country in one calendar year is?
GDP
Per unit of output = what?
Productivity
When prices rapidly increase to a level where currency starts to become unevaluable to use and the economy starts to collapse
Hyperflation
When the economy has 6 consecutive months of negative GDP, this period is known as what?
A recession
Structural Unemployment
What period of the business cycle represents a period of economic growth?
Expansion
When the government spends more money than brings in revenue from taxes, what does this mean for our countries balance sheet?
Budget Deficit
A percent change in prices from year to year is represented with the what?
Inflation Rate
What types of unemployment make up the natural rate of unemployment?
Frictional and Structural Unemployment
When the economy is running too hot/fast, where prices start to gradually rise, putting pressure on scare resources. This is known as what according to the business cycle model?
Inflationary Gap
GDP that is adjusted for inflation from year to year is called what?
Real GDP
What is the best measurement of a nation's standard of living?
What powers does congress have to institute fiscal policy?
Increase and or Decrease Taxes
Increase and or Decrease Government Spending
Assume we are in a recession, what is the specific type of fiscal policy will congress enact to climb out of it?
Expansionary Fiscal Policy
What are the 4 components of GDP?
Consumption, Investment, Government Spending, and Net Exports
What limitation does GDP per capita have when measuring a countries economic health?
It's too heavily weighted towards countries with very large populations
This tool measures changes in prices in a market basket of everyday household items that tracks inflation from one year to the next?
CPI (consumer price index)
Tell me the two possible methods that congress can do when it comes to contractionary fiscal policy
Decrease government spending and or increase taxes
What kind of government spending does not qualify towards GDP, unless that money is spend on new and final goods?
Transfer Payments
This school of economics argues that the economy can fix itself, without the need of government intervention. This is what they used that lead to the Great Depression.
Classical Theory of Economics
Using our U.S. Dollars as an example. When our dollars have 1's, 5's, 10's, 20's, 50's, and 100's, this is considered to be what function of money?
Unit of account
Assume you are qualified for an auto loan. The banking institution wants to make a 3% profit off of the loan that they give you. In addition, the bank believes that they expected inflation rate for the term of your loan will be 5%. What interest rate % do you think the bank will make you end up paying in this scenario?
8%.
Real Interest Rate + Expected Interest Rate = Nominal Interest Rate
Which of the following is NOT part of the labor force, assuming the survey data was taken today?
A) a person starting their 1st day of work on their 16th birthday today
B) An officer in the military
C) A person who was just released from prison today
B) an officer in the military